The Law Firm Nixon Peabody LLP recently published a helpful update entitled “What does codification of the “Economic Substance Doctrine” mean for tax credit transactions?” After years of anticipation, the “economic substance test” is now part of the Internal Revenue Code. The new provision, which is already effective, can result in disallowance of tax benefits, and also impose as much as a 40% penalty. Fortunately, as discussed in our alert, there is a savings feature for tax credit transactions. The economic substance test impacts transactions involving LIHTC, Historic Tax Credits, New Markets Tax Credits and Energy Credits. Read More…